School board presented Anschutz information

Dumont and Herwig speak to school board

By David Persons

Trail-Gazette

Posted:
02/27/2014 05:52:18 AM MST

About the EPMC/Anschutz Health and Wellness project

A sales contract approved by the town and placed on the April 1 ballot, sets the value of the sale for Lot 4 of the Stanley Historic District at $1.65 million. Under conditions of the contract, Stanley Hotel owner John Cullen will make an earnest money payment of $100,000 up front and then another payment of $900,000 at closing. It also calls for a $650,000 promissory note due in two years. Estes Park Medical Center, which plans to build and operate the wellness center, must come up with $325,000 for its part in the deal and enough money to start construction in two years. If it does, then the final $325,000 will be written off by the town. As part of that deal, Cullen will own all the property but lease the land EPMC needs for the wellness center. He is planning to lease the land to EPMC for 99 years at $1 a year. If the medical center can't find the money, Cullen said he will pay the entire remaining balance of $650,000 and either build the wellness center himself at his cost or turn the entire property into open space. The $15 million project includes the $5 million wellness center and a $10 million, 50-room hotel with food services and some employee housing.

Estes Park Medical Center officials made a presentation Monday night to the new Estes Park School District Board of Directors about the proposed $15 million wellness center to be built near the Stanley Hotel.

The center - the EPMC/Anschutz Health and Wellness Center - is a joint venture between the hospital and the Stanley Hotel. Local wellness training will be provided by staff from the Aurora-based Anschutz Health and Wellness Center.

There is a measure on the April 1 election ballot that asks Estes Park residents to approve the sale of Lot 4 of the Stanley Historic District so that the project can proceed.

The hospital officials, who are seeking community support for the measure, spoke to the school board about the significance of the wellness center during its monthly meeting.

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"This is a project that crosses silos," said EPMC Chief of Staff Frank Dumont. "We are dealing with a health crisis in the United States. One-third of us are obese. One-third of us are overweight. The other one-third is relatively healthy.

"As a result of two-thirds being overweight and obese, we have an epidemic of diabetes. We are looking at the first generation of children who have a life expectancy less than their parents."

Dumont said the solution lies in a new form of healthcare - an emphasis on wellness and prevention.

"When I became a doctor, I was taught to wait until patients are sick before treating them," he said.

But, that method didn't always solve the problem and was not really cost-effective over time.

"The shift now is toward wellness, fitness, and preventative medicine," Dumont said.

While the new wellness center would obviously help paying visitors, the same type of healthcare would be available to groups of residents at the community recreation center.

It would be a win-win for visitors and residents.

An added bonus, he noted, would be the financial boost to the local economy, the hospital, and the school district.

"Estes Park lives on tourism," Dumont said. "However, the economy has been hit hard recently, first by the recession, then fires, then the flood. We're suffering.

"That's caused some people to leave. When residents leave, they take children with them. That means less money and less funding (for the school district)."

Dumont added that while the new wellness center "is not a perfect solution" to all of the local economy's problems, it is a start.

He cited that it will provide a new form of healthcare and 60-70 new jobs. And, coming with those jobs will be families with children who will attend the school district.

Estes Park Medical Center CEO Brian Herwig went further to explain the financial significance of the new wellness center to the economy and the school district.

"In my opinion, this will strengthen the hospital, and the economy, and help strengthen the schools, too," Herwig said. "This center will allow us (EPMC) to create a new revenue stream without new taxes."

Herwig was quick to point out that the wellness center is not part of the town's proposed 1 percent sales tax increase (also on the April 1 ballot) which would support the new community recreation center.

"But, we do support (the passage of) it," he said.

Herwig said the hospital has been hit hard in recent years with changes in the way that Medicare and Medicaid payments are made. Medicare now reimburses at a 45 percent rate, while Medicaid reimburses at a 25 percent rate. New legislation is cutting that even deeper.

On top of that, there has been a recent decline in property values which means the hospital district will get about $300,000 less this year from Larimer County property taxes.

If the wellness center is built, it could change the entire landscape of the local economy, according to a recent analysis conducted by the Regional Economics Institute at Colorado State University. The analysis was commissioned by the Estes Park Economic Development Corporation and the Northern Colorado Economic Development Corporation.

The analysis found that the town would receive $3.96 million in taxes from the project in the first five years. It also found that the wellness center facilities will incur $18.6 million in major operating expenses and inject $9.3 million of those expenses into the local economy over the same time period.

In addition, the wellness center project is expected to create 70 new jobs over the first five years, with an annual wage projected to $52,637. That's 28 percent higher than Larimer County's average annual wage.

Herwig pointed out that he's expecting about $1.5 million in new annual revenue based on a model of just 30 percent occupancy, which is well below the Estes Park market rate. He added that wellness center visitors will be charged $3,000 per person for a 4-day stay at the center.

Because wellness center staff will also be working with residents and children at the new community recreation center, Herwig said he expects to see healthier children.

"If we spend time with children, we should be below that 60 percent (obesity) rate," he said. "We should also have a lower model of teenage smoking."

Herwig summarized by pointing out that the wellness center will financially enable EPMC to remain an independent and sustainable hospital.

School board members followed the presentation with questions about the project.

"You said that the new 50-room hotel being built by the Stanley was for residents at the wellness center. Could the Stanley Hotel use it as extra rooms for its main hotel?" asked board member Patricia Wedan.

"The rooms are primarily designed for wellness (visitors) but we would allow (the hotel) to use some of them if we had something like 30 guests and weren't using all the rooms," Herwig said.

"Are you confident that you can raise $325,000 to start construction of the wellness center?" Wedan asked.

"We have that already set aside," Herwig said. "Besides, we have the word of (Stanley Hotel owner) John Cullen that he will build the wellness center if we can't get all the money."

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